SaaStr 726: How to Build Out Your SDR Function in 2024 with Sam Blond, Partner at Founders Fund - The Official SaaStr Podcast: SaaS | Founders | Investors Recap

Podcast: The Official SaaStr Podcast: SaaS | Founders | Investors

Published: 2024-02-23

Duration: 2315

Guests: Sam Blond

What Happened

Sam Blond, Partner at Founders Fund and host of SaaStr CRO Confidential, provides insights into building a Sales Development Representative (SDR) function for SaaS companies in 2024. He draws on his experience as Chief Revenue Officer at Brex, where they initially focused on Account Executive (AE) outbound before hiring SDRs. At Brex, they had six AEs before bringing on their first SDR, a senior director named Ashley Kelly, to refine the outbound process.

Ashley Kelly's first move was recruiting three experienced SDRs from her network. At Brex, SDRs were pivotal, with outbound efforts generating 80% of the company's revenue. Notably, SDRs at Brex eventually brought in more revenue per representative than the AEs. This highlights the importance of having a strong SDR function to drive demand and revenue growth, while also serving as a training platform for future AEs.

Sam Blond emphasizes that AEs should engage in outbound activities from the start and continue doing so even after SDRs are hired. Before expanding an SDR team, it's crucial to have a proven outbound process and a capable manager in place. Initial SDR hires should have some level of experience and can often be sourced through personal networks.

Measuring SDR performance should start with the quantity of opportunities generated, transitioning towards the quality of those opportunities and the revenue they bring. Scaling the SDR team should rely on data and efficiency rather than merely increasing the ratio of SDRs to AEs. At Brex, enhancements like lead scoring and tying incentives to closed revenue improved SDR performance.

Outbound strategies are shifting away from generic email sequences due to diminishing returns. Effective approaches now include leveraging personal and professional networks, A-B testing strategies, and integrating creative tactics like sending champagne offers to potential clients. These creative methods have shown higher conversion rates compared to traditional product offers.

Incorporating brand presence, such as billboards in strategic locations, and aligning outbound messaging with PR events like fundraising announcements can boost response rates. Additionally, coordinating marketing efforts, such as reaching out to prospects who visit the company website, can enhance the success of outbound strategies.

Key Insights

• At Brex, the introduction of an SDR function led to significant revenue generation, with SDRs eventually surpassing Account Executives in revenue per representative. This underscores the potential of a well-executed SDR strategy in SaaS companies.
• Before hiring SDRs, ensure a solid outbound process is in place with effective management. Initial hires should have experience and can be sourced from personal networks to quickly establish a successful team.
• Outbound strategies are evolving from broad email campaigns to more personalized and creative approaches, such as sending champagne offers. These methods have shown higher conversion rates, indicating a shift towards quality over quantity.
• Combining outbound efforts with brand marketing and PR events can increase engagement and conversion rates. Coordinated strategies, such as reaching out after website visits, can further enhance outbound effectiveness.